Falling house prices in Auckland made residential property a more attractive investment option in the six months to March, according to interest.co.nz’s latest Rental Yield Indicator figures. However the large rises in Wellington prices have reduced yields in the Wellington region.

10 Auckland suburbs were monitored by the Indicator, the indicative yields in the six months to March were up in 6 areas, unchanged in 3 and down in 1, compared to the six months to December.

The rise in yields for Auckland was mainly caused by falling prices, with the lower quartile selling prices in 8 of the 10 Auckland suburbs monitored falling in the six months to March compared to the six months to December.

Over the same period, the median weekly rents increased in 5 of the 10 Auckland suburbs, unchanged in 4 and declined in 1, compared to the six months to December.

The trend was that lower quartile prices overall were falling while rents were rising or flat, and that pushed up the gross rental yields, suggesting that buying an investment property in Auckland had become slightly more attractive in the first quarter of this year.

 In the six months to March last year, the yields in the Wellington suburbs monitored by the Indicator ranged from 5.4% to 7.7%. In the six months to March this year they ranged from 4.2% to 5.9%, suggesting that buying an investment property in Wellington was substantially less attractive now than they were 12 months ago.

 

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